1. MSI afterburner is what I would recommend as well. Also use a program like GPU-Z to monitor the card's temperatures and voltages while you are overclocking and stress testing.
2. Go up in say 10mhz increments and then run a stress program like Unigine Heaven 3.0, or 3dmark11. You could run furmark, but it is unnecessary as no game actually stresses the GPU in that manner. I would recommend Unigine heaven, run it on max, and when it is running, press F9 to start the benchmarking process. If it passes without artifacts or crashing then your stable. But for your final overclock I would test it with a variety of programs and games.
3. I would start with the GPU clock first, and once it is stable I would overclock the memory. It can be done in any order, however a higher GPU clock yields better performance.
4. I would keep the temperature under 80C as a general rule of thumb. Also watch the voltage, don't go too high or you can cause some damage. Increase the clock by 10mhz, and stress test. If its stable, and temperature is fine, keep increasing it by 10mhz and stress testing, until it is either running close to 80C, or it is unstable. If it becomes unstable, and temperatures are fine, then you can bump up the voltage by an increment. However don't push the voltage too high. If you are overclocking the memory, and you get artifacts that usually means you should back down your memory clock.
I personally steer away from overclocking the memory on GPU's
It doesn't have a temp sensor (most don't, mine actually does) so it can be hard to know how much thermal stress you are putting on it.
Some coolers don't mate the heatsink with the memory so it is not cooled except by the fan a little tiny bit. Even when it is mated the thermal pads they use as standard are not great.
The performance increase is usually tiny compared to overclocking the gpu core.
Budget Graphics cards use the cheapest RAM possible so the headroom is simply not there. Some cards have memory heat issues running at stock speeds ( i had a palit 4850 yonks ago that had a "flower" cooler and memory overheating problems at stock).
If its the gigabyte windforce cooler that you have on that card, then the memory should be cooled, however if its the reference version the cooling for the ram won't be great. As americanbrian said memory overclocking is not really worth it, although it can increase your fps rates, it may limit how far you can go with the core clock, which yields more performance per mhz. If you go to far on the memory you will see artifacts, but it could be damaged if its not properly cooled.